SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENTRevolving Credit Agreement |
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HARDINGE INC | MANUFACTURERS AND TRADERS TRUST COMPANY | JPMORGAN CHASE BANK, N.A. | KEYBANK NATIONAL ASSOCIATION. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.1
SECOND AMENDED AND RESTATED among HARDINGE INC. (the “ Borrower ”) the Banks signatory hereto MANUFACTURERS AND TRADERS TRUST COMPANY
as Agent JPMORGAN CHASE BANK, N.A. as Syndication Agent and KEYBANK NATIONAL ASSOCIATION As Documentation Agent Amended and Restated as of November 21, 2006
TABLE OF CONTENTS
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EXHIBITS
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SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT dated as of November 21, 2006 is entered into by and among HARDINGE INC. , a corporation organized under the laws of New York, each of the banks which is a signatory hereto, MANUFACTURERS AND TRADERS TRUST COMPANY , a New York banking corporation, as Agent and Lead Arranger for the Banks, JPMORGAN CHASE BANK, N.A. , a national banking association formed and existing under the laws of the United States of America, as Syndication Agent and KEYBANK NATIONAL ASSOCIATION , a national banking association formed and existing under the laws of the United States of America, as Documentation Agent. RECITALS A. The Borrower, the Banks, the Agent, the Syndication Agent and the Documentation Agent are parties to an Amended and Restated Revolving Credit and Term Loan Agreement dated January 28, 2005, as the same has been amended by Amendment No. 1 to the Amended and Restated Revolving Credit and Term Loan Agreement dated February 11, 2005, Amendment No. 2 to the to the Amended and Restated Revolving Credit and Term Loan Agreement dated July 16, 2005, Amendment No. 3 to the Amended and Restated Revolving Credit and Term Loan Agreement dated December 22, 2005 and Amendment No. 4 to the Amended and Restated Revolving Credit and Term Loan Agreement dated June 7, 2006. (collectively, the “ Existing Credit Agreement ”). B. The parties hereto desire to amend, restate and modify, but not extinguish, the Existing Credit Agreement in its entirety, as herein provided. NOW, THEREFORE , in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows: ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS Section 1.01 Definitions . As used in this Agreement the following terms have the following meanings: “ Account Control Agreements ” means the Account Control Agreements as may be required pursuant to the terms of the Security Documents, given by the Borrower and the applicable financial institutions where Borrower maintains its operating accounts in favor of the Agent for the benefit of the Banks, which Account Control Agreements shall in all respects be acceptable to the Agent and the Banks, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.
“ Acquisition ” means the acquisition of: (a) a controlling equity interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such equity interest or upon exercise of an option or warrant for, or conversion of securities into, such equity interest, or (b) assets of another Person which constitute all or substantially all of the assets of such Person or of a line or lines of business conducted by such Person. “ Additional Costs ” has the meaning given to such term in Section 3.01 hereof. “ Additional Technical Information ” shall mean and refer to the technical information required for the manufacture of the products, accessories and spares, including but not limited to the blueprints, designs, schematics, drawings, specifications, computer source and object codes, customer lists and other proprietary rights and assets of a similar nature, all as described with particularity in the Bridgeport Acquisition Documents. “ Administrative Questionnaire ” means the administrative questionnaire in the form supplied by the Agent. “ Affected Loans ” has the meaning given to such term in Section 3.04 hereof. “ Affected Type ” has the meaning given to such term in Section 3.04 hereof. “ Affiliate ” means any Person: (a) which directly or indirectly controls, or is controlled by, or is under common control with, the Borrower or any of its Subsidiaries; (b) which directly or indirectly beneficially owns or holds 5% or more of any class of voting stock of the Borrower or any such Subsidiary; (c) 5% or more of the voting stock of which is directly or indirectly beneficially owned or held by the Borrower or such Subsidiary; or (d) which is a partnership in which the Borrower or any of its Subsidiaries is a general partner. The term “ control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. “ Agent ” means M&T Bank in its capacity as agent of the Banks pursuant to Article 10, and not in its individual capacity as a Bank, and any successor Agent appointed pursuant to Article 10. “ Agreement ” means this Second Amended and Restated Revolving Credit and Term Loan Agreement, as amended, supplemented, restated or otherwise modified from time to time. References to Articles, Sections, Exhibits, schedules and the like refer to the Articles, Sections, Exhibits, schedules and the like of this Agreement unless otherwise indicated. 2
“ Aggregate Commitment ” means, on any date of determination, the aggregate amount on such date of the Commitments of all of the Banks. On the Effective Date, the Aggregate Commitment is $91,600,000. “ Aggregate Revolving Commitment ” means, on any date of determination, the aggregate amount on such date of the Revolving Commitments of all of the Banks. On the Effective Date, the Aggregate Revolving Commitment is $70,000,000. “ Aggregate Revolving Credit Exposure ” means as of any date of determination, the sum of Revolving Credit Exposure of all the Banks. “ Aggregate Term Loan Commitment ” means on any date of determination, the aggregate amount on such date of the Term Loan Commitments of all of the Banks.. “ Applicable Margin ” means for each Variable Rate Loan or Eurocurrency Loan, or with respect to the Revolving Commitment Fees payable hereunder, as the case may be, the applicable rate per annum on the table next following under the caption “Variable Margin”, “Eurocurrency Margin” or “Revolving Commitment Fee Rate”, respectively, under the Pricing Level then in effect based upon Borrower’s Leverage Ratio as reflected in the Financials for the immediately preceding four Fiscal Quarters for income statement items and the most recently ended Fiscal Quarter for balance sheet items, computed as provided below.
For purposes of the foregoing, notwithstanding anything herein to the contrary 3
(a) if at any time the Borrower fails to deliver the Financials required under Sections 6.02(a) or 6.02(b) on or before the date such Financials are due, Pricing Level V shall be deemed applicable for the period commencing five (5) Business Days after such required date of delivery and ending on the date which is five (5) Business Days after such Financials are actually delivered, after which the Pricing Level shall be determined using such Financials in accordance with the table above as applicable; (b) adjustments, if any, to the Pricing Level then in effect shall be effective five (5) Business Days after the Agent has received the applicable Financials (it being understood and agreed that each change in Pricing Level shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change); and (c) each determination of the Applicable Margin made by the Agent in accordance with the foregoing shall, in the absence of demonstrable error, be conclusive and binding on the Borrower and each Bank; and (d) the initial Applicable Margin on the Effective Date shall be based on Level IV until the first adjustment thereto as provided above. “ Arranger ” means M&T Bank in its capacity as sole arranger for the credit facilities provided under this Agreement. “ Assignment and Assumption Agreement ” has the meaning given to such term in Section 11.05(b) hereof. “ Assignment of Leases and Rents ” means that certain Assignment of Leases and Rents dated as of the Original Effective Date (as the same may be amended, restated, supplemented or otherwise modified from time to time), as granted by Hardinge Technology Systems, Inc. in favor of the Agent for the benefit of the Banks, whereby Hardinge Technology Systems, Inc. granted, as collateral for the Obligations, an assignment of the leases and rents for the principal place of business for the Borrower. “ Authorization Letter ” means the letter agreement executed by the Borrower in the form of Exhibit A hereto. “ Authorized Officer ” means the president, chief executive officer, chief financial officer or the secretary of the Borrower or any other Person designated by any of the foregoing in writing to the Agent from time to time to act on behalf of any Borrower which designation has not been rescinded in writing, in each case acting singly, provided that two Authorized Officers shall be required to modify the wiring instructions for any Loan. “ Bank ” means the banks who are parties to this Agreement on the date hereof and any other bank that shall become a party hereto after the date hereof pursuant to an Assignment and Assumption, other than any such Person that shall have ceased to be a party hereto pursuant to an 4
Assignment and Assumption. Unless the context otherwise requires, the term “Bank” includes the Swing Line Bank. In addition to the foregoing, for the purpose of identifying the Persons entitled to share in the collateral and the proceeds thereof under, and in accordance with the provisions of, this Agreement and the Security Documents, the term “Bank” shall include Affiliates of a Bank providing Bank Products. “ Bank Product Agreements ” means those agreements entered into from time to time by the Borrower or any Subsidiary in connection with any of the Bank Products. “ Bank Product Obligations ” means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that the Borrower or any of its Subsidiaries is obligated to reimburse to anyone as a result of purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products. “ Bank Products ” means any service or facility (but excluding the Loans and the Facility Letters of Credit) extended to Borrower or any Subsidiary, including: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including controlled disbursement accounts or services, or (g) facilities for foreign exchange, foreign derivative products and foreign exposures. “ Bankruptcy Event ” has the meaning given to such term in Section 2.08(b) thereof. “ Basis Point ” means one one-hundredth of one percent. “ Borrower ” means Hardinge Inc., a New York corporation, and its successors. “ Bridgeport Acquisition Documents ” means the various agreements and instruments executed by and between the Borrower and BPT IP, LLC, including but not limited to, that certain Alliance Agreement dated November, 2004, whereby among other things, BP IP, LLC granted to the Borrower an option to purchase the Additional Technical Information on or before December 31, 2005, as described with particularity in Section 7.6.3 of the Alliance Agreement. “ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that when used in connection with a Eurocurrency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in deposits in the applicable currency in the London interbank market. “ Capital Expenditures ” means for any period, the sum of (without duplication) of all expenditures during such period (including, but not limited to, the purchase, construction or rehabilitation of equipment or other physical assets) that are required to be capitalized under GAAP, whether or not financed. 5
“ Capital Lease ” means any lease which has been or should be capitalized on the books of the lessee in accordance with GAAP. “ Capital Securities ” means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital, whether now outstanding or issued or acquired after the Original Effective Date, including common shares, preferred shares, membership interests in a limited liability company, limited or general partnership interests in a partnership, interests in a trust, interests in other unincorporated organizations or any other equivalent of such ownership interest. “ Change in Control ” means: (a) except as to: (i) officers and directors in office as of the Original Effective Date, and (ii) the Hardinge Inc. Pension Plan, Hardinge Inc. Retirement Plan or other compensation plan of Borrower, the acquisition of ownership, directly or indirectly, beneficially or of record, of any Person or group (within the meaning of the Securities Act of 1934 and Rule 13d-5 of the Securities and Exchange Commission as in effect on the date hereof) of Capital Securities representing more than twenty five percent (25%) of the aggregate ordinary voting power in the election of Borrower’s directors; or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who are neither: (i) nominated by the board of directors of the Borrower, nor (ii) appointed by the directors so nominated. “ Code ” means the Internal Revenue Code of 1986, as amended from time to time. “ Commercial Letter of Credit ” shall mean a documentary Letter of Credit issued in respect of the purchase of goods or services by Borrower or any of its Subsidiaries in the ordinary course of its business. “ Commitment ” means, with respect to a Bank, both its Revolving Commitment and its Term Loan Commitment. “ Compliance Certificate ” has the meaning given to such term in Section 6.02(c) hereof. “ consolidated ” and “ consolidating ”, when used with reference to any term, mean that term as applied to the accounts of the Borrower (or other specified Person) and all of its Subsidiaries (or other specified group of Persons), or such of its Subsidiaries as may be specified, consolidated or consolidating, as the case may be, in accordance with GAAP. “ Consolidated Interest Expense ” means for any period, the sum for the Borrower and its Consolidated Subsidiaries (determined on a consolidated basis without duplication, in accordance with GAAP) of the following: (a) all interest with respect of Funded Debt (including, without limitation, the interest component of any payments in respect of Capital Leases) accrued or capitalized during such period (whether or not actually paid during such period), (b) the net amount payable (or minus the net amount receivable) under Hedging Agreements during such period (whether or not actually paid or received during such period); (c) without duplication any 6
periodic commitment fees and other fees payable to the Agent or the Bank pursuant to the Loan Documents; and (d) without duplication, any periodic fees paid by the Borrower or any of its Subsidiaries to other creditors, which fees shall be related to or arising out of any Debt owed to other creditors. “ Consolidated Net Income ” means for any period the net income or loss of the Borrower and its Consolidated Subsidiaries for such period determined on a consolidated basis, without duplication, in accordance with GAAP, provided that there shall be excluded from such net income or loss: (a) the income of any Person (other than a Consolidated Subsidiary) in which any other Person (other than the Borrower or any Consolidated Subsidiary or any director holding qualifying shares in compliance with applicable law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of the consolidated Subsidiaries by such Person during such period, and (b) the income or loss of any Person accrued prior to the date on which it becomes a Subsidiary or is merged into or consolidated with the Borrower or any consolidated Subsidiary or the date on which such Person’s assets are acquired by the Borrower or any Consolidated Subsidiary. “ Consolidated Tangible Net Worth ” means as of the date of determination, without duplication and determined in accordance with GAAP: (a) the total assets of the Borrower and its Consolidated Subsidiaries, minus (b) the total liabilities of Borrower and its Consolidated Subsidiaries and all intangible assets of the Borrower and its Consolidated Subsidiaries, and (c) minus any decrease or plus any increase in the value of intangible assets related to the translation of adjustments, provided, however, that there shall be excluded from all such calculations both: (x) cumulative foreign currency translation adjustments, and (y) changes in pension liabilities recorded in accordance with SFAS 87. “ Credit Party ” or “ Credit Parties ,” individually or collectively, means and refers to the Borrower and the Subsidiary Guarantors. “ Customer Notes ” means any and all notes and other evidence of indebtedness (except accounts receivable arising in the ordinary course of business) listed on that certain Due Diligence Certificate to be delivered by the Borrower to the Agent on or before the Effective Date, which notes were issued prior to the Original Effective Date to the Borrower and its Subsidiaries for the payment obligations of customers for goods or services provided in the ordinary course of business and that Borrower and its Subsidiaries sold prior to the Original Effective Date pursuant to the Customer Note Sale Agreements. “ Customer Note Sale Agreements ” means, collectively, those agreements entered into prior to the Original Effective Date, between the Borrower and certain third party purchasers, for the sale, by the Borrower of certain of its Customer Notes, all of which are listed on that certain Due Diligence Certificate to be delivered by the Borrower to the Agent on or before the Effective Date. “ Customer Note Sale Agreement Guaranties ” means, collectively, those limited guaranties granted by the Borrower prior to the Original Effective Date, whereby the Borrower 7
guaranteed, on a limited basis, the payment of its certain of its Customer Notes as contemplated under the terms of the Customer Note Sale Agreements, all of which are listed on listed on that certain Due Diligence Certificate to be delivered by the Borrower to the Agent on or before the Effective Date. “ Debt ” means, with respect to any Person: (a) indebtedness of such Person for borrowed money whether or not evidenced by bonds, debentures, notes or similar instruments; (b) obligations of such Person as lessee under Capital Leases or Synthetic Lease Obligations, (c) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clause (a) and (b) above, (not otherwise reserved for), which in the case of the Borrower, shall specifically include any contingent and direct obligations arising under or in connection with the Customer Note Sale Agreement Guaranties, (d) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable in the ordinary course of business and accrued expenses arising in the ordinary course of business), (e) all obligations, contingent or otherwise, with respect to the face amount of all letters of credit, including the Facility Letters of Credit issued hereunder (whether or not drawn) (excluding, however, in all cases, Commercial Letters of Credit), bankers’ acceptances and similar obligations issued for the account of such Person, , (f) all guaranties of indebtedness of any Person, and (g) all Debt of any partnership of which such Person is a general partner. “ Default ” means any event which with the giving of notice or lapse of time, or both, would become an Event of Default. “ Default Rate ” means, with respect to the principal of any Loan and, to the extent permitted by law, any other amount payable by the Borrower under this Agreement (including the repayment of any Facility LC Disbursement) or any Note that is not paid when due (whether at stated maturity, by acceleration or otherwise), a rate per annum during the period from and including the due date, to, but excluding the date on which such amount is paid in full equal to three percent (3.0%) above the Variable Rate as in effect from time to time plus the Applicable Margin (provided that, if the amount so in default is principal of a Eurocurrency Loan and the due date thereof is a day other than the last day of the Interest period therefor, the “Default Rate” for such principal shall be, for the period from and including the due date and to but excluding the last day of the Interest Period therefor, three percent (3.0%) above the interest rate for such Loan as provided in Section 2.07 hereof and, thereafter, the rate provided for above in this definition). “ Documentation Agent ” means KeyBank National Association in its capacity as documentation agent of the Banks, and not in its individual capacity as a Bank. “ Domestic Subsidiary ” means any Subsidiary of Borrower that is organized and existing under the laws of any jurisdiction in the United States of America. 8
“ EBITDA ” means Consolidated Net Income prior to the deduction of Consolidated Interest Expense, prior to the deduction of federal or foreign corporate income and corporate franchise taxes, prior to the deduction of depreciation and amortization and MINUS to the extent included in the determination of Consolidated Net Income for such period, the sum of the following for the Borrower and its Consolidated Subsidiaries: (a) interest income, (b) any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise able to be included as a separate item in the statement of Consolidated Net Income for such period, gains on the sales of assets outside the ordinary course of business), and (c) any other non-cash income, all as determined on a consolidated basis. “ Effective Date ” means November 21, 2006, or, if later, the date on which the conditions contained in Article 4 have been satisfied (or waived in accordance with Section 11.01). “ Environmental Laws ” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing distribution, use, treatment, storage, disposal, transport, or handling-of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes. “ ERISA Affiliate ” means each Person (as defined in Section 3(9) of ERISA), which together with the Borrower or a Subsidiary of the Borrower, would be deemed to be a “single employer” (i) within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) or 4001(b)(i) of ERISA or (ii) as a result of the Borrower or a Subsidiary of the Borrower being or having been a general partner of such Person. “ Equity Issuance ” means: (a) any issuance or sale by the Borrower or any of its Subsidiaries of: (i) any Capital Securities, (ii) any warrants or options exercisable in respect of Capital Securities (other than any warrants or options issued to directors, officers or employees of the Borrower or any of its Subsidiaries in their capacity as such and any Capital Securities of the Borrower issued upon the exercise of such warrants), or (iii) any other security or instrument representing an equity interest (or the right to obtain any equity interest) in the Borrower, or (b) the receipt by the Borrower of any contribution to its capital (whether or not evidenced by any Capital Securities). “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, including any rules and regulations promulgated thereunder. “ Eurocurrency Loan ” means any Loan when and to the extent the interest rate is determined on the basis of the definition of “LIBOR Rate”. 9
“ Eurocurrency Rate ” means for any Interest Period for any Eurocurrency Loan a rate per annum determined by the Agent to be equal to the relevant LIBOR Rate for the Eurocurrency Loan, adjusted for any applicable Reserve Requirement. “ Existing Bridge Loans ” means the Bridge Loans made pursuant to, and as defined in, Amendment No. 3 to the Existing Credit Agreement that are outstanding immediately prior to the Effective Date. “ Existing Facility Letter of Credit ” means a Facility Letter of Credit issued by the Issuing Bank pursuant to Section 2.14 of the Existing Agreement. For the avoidance of doubt, Existing Facility Letters of Credit do not include the JPMorgan Letters of Credit. “ Existing JP Morgan Letters of Credit ” means the outstanding Letters of Credit issued by JPMorgan for the account of the Borrower prior to the date of this Agreement which are set forth on Schedule I to this Agreement. “ Excluded Foreign Subsidiaries ” has the meaning given thereto in Section 5.12(b). “ Existing Other Debt ” means the Debt of the Borrower and its Subsidiaries existing as of the Original Effective Date, all of which is set forth in Schedule II to this Agreement “ Existing Revolving Loans ” means the Loans made pursuant to, and as defined in, the Existing Credit Agreement that are outstanding immediately prior to the Effective Date. “ Existing Term Loans ” means the Loans made pursuant to, and as defined in, the Existing Credit Agreement that are outstanding immediately prior to the Effective Date. “ Event of Default ” has the meaning given such term in Section 9.01 hereof. “ Facility LC Commitment ” means the commitment of the Issuing Bank to issue Facility Letters of Credit pursuant to Section 2.14. “ Facility LC Disbursement ” means a payment made by the Issuing Bank pursuant to a Facility Letter of Credit. “ Facility Letter of Credit Collateral Account ” has the meaning given to such term in Section 2.14(i) hereof. “ Facility LC Exposure ” means, at any time, the sum of: (a) the aggregate undrawn amount of all outstanding Facility Letters of Credit at such time, plus (b) the aggregate amount of all unreimbursed Facility LC Disbursements. The Facility LC Exposure of any Bank at any time shall be its Pro Rata Share of the Facility LC Exposure at such time determined in accordance with the foregoing sentence. 10
“ Facility Letter of Credit ” means a Letter of Credit issued by the Issuing Bank pursuant to Section 2.14 of this Agreement. For the avoidance of doubt, Facility Letters of Credit do not include JPMorgan Letters of Credit. “ Facility Letter of Credit Fee ” has the meaning given to such term in Section 2.11(b) hereof. “ Facility Letter of Credit Fronting Fee ” has the meaning given to such term in Section 2.11(b). “ Facility Letter of Credit Collateral Shortfall Amount ” has the meaning given to such term in Section 9.02(a) hereof. “ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions as published by the Federal Reserve Bank of New York for such day (or for any day that is not a Business Day, for the immediately preceding Business Day). “ Fee Letters ” means the Engagement Letter dated October 11, 2006 between Borrower and M&T Bank, the letter agreement dated December 14, 2004 between Borrower and M&T Bank, both relating to certain fees payable by the Borrower with respect to the transactions contemplated by the Existing Credit Agreement and this Agreement “ Financials ” means the annual or quarterly financial statements, and accompanying certificates and other documents, of the Borrower required to be delivered pursuant to Section 6.02(a) or 6.02(b). “ Fiscal Quarter ” means the three (3) month period ending on or around March 31, June 30, September 30 and December 31 of each year. “ Fiscal Year ” means the twelve (12) month period ending on December 31 of each year. “ Fixed Charges ” means as of the date of determination all of the scheduled principal payments on Debt, interest payments on Debt, dividends and all other distributions of the Borrower and its Subsidiaries (excluding dividends and distributions from a Subsidiary to the Borrower) for the twelve (12) month period ending on such date. “ Fixed Charges Coverage Ratio ” means as of the date of determination, the ratio of: (a) EBITDA minus : (i) Non-Financed Capital Expenditures, and (ii) Taxes paid in cash, for the twelve (12) month period ending on such date, divided by (b) Fixed Charges for the same period. “ Foreign Subsidiary ” means any Subsidiary of Borrower that is not a Domestic Subsidiary. 11
“ Forfeiture Proceeding ” means any action, proceeding or investigation affecting the Borrower or any of its Subsidiaries or Affiliates before any court, governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or the receipt of notice by any such party that any of them is a suspect in or a target of any governmental inquiry or investigation, which may result in an indictment of any of them or the seizure or forfeiture of any of their property. “ Funded Debt ” means, without duplication determined in accordance with GAAP, all of Borrower’s and its Consolidated Subsidiaries’ Debt. “ GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time, applied on a basis consistent with those used in the preparation of the audited financial statements referred to in Section 5.05 (except for changes concurred in by the Borrower’s independent public accountants). “ Guaranty ” means the Amended and Restated Guaranty made by Hardinge Technology Systems, Inc. in favor of the Agent for the benefit of the Banks dated as of the Original Effective Date, as it may be amended, supplemented, restated or otherwise modified from time to time. “ Guaranty Supplement ” means supplements to the Guaranty to be executed by the required Subsidiaries of the Borrower pursuant to Section 6.08 herein, which shall be in the form attached to the Guaranty as an exhibit. “ Hazardous Materials ” means any substance regulated under any Environmental Laws. “ Hedging Agreement ” means any interest rate swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect a Person against fluctuations in interest rates. “ Hedging Obligation ” means any liability of the Borrower or any of its Subsidiaries under any Hedging Agreement. The amount of obligation in respect of any Hedging Obligation shall be deemed to be the incremental obligation that would be reflected in the financial statements of the Borrower and its Consolidated Subsidiaries in accordance with GAAP. “ Indemnified Liability ” has the meaning given to such term in Section 11.03 hereof. “ Intellectual Property Security Agreement ” means the Intellectual Property Security Agreement granted by the Borrower, certain Subsidiaries of the Borrower and any other Person listed in the signature pages thereto, in favor of the Agent for the benefit of the Banks dated as of Original Effective Date securing the Obligations and in the form attached to the Security Agreement as an exhibit, as such agreement may be amended, supplemented, restated or otherwise modified from time to time. “ Intellectual Property Security Agreement Supplement ” means supplements to the Intellectual Property Security Agreement to be executed by the required Subsidiaries of the 12
Borrower pursuant to Section 6.08 herein, which shall be in a the form attached to the Intellectual Property Security Agreement as an exhibit. “ Intercompany Debt ” shall mean Debt that is owed by a Subsidiary to the Borrower or any other Subsidiary or by any Subsidiary to any other Subsidiary. “ Interest Period ” means the period commencing on the date a Loan is made and ending, as the Borrower may select pursuant to Section 2.08: (a) in the case of Variable Rate Loans, the period commencing on the date such Variable Rate Loan is made and ending on the Quarterly Date next succeeding such date; and (b) in the case of Eurocurrency Loans, on the numerically corresponding day in the first, second, third, or sixth calendar month thereafter, provided , however , that each such Interest Period which commences on the last Business Day of a calendar month (or any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the subsequent calendar month. “ Issuing Bank ” means M&T Bank in its capacity as the Issuing Bank of a Facility Letter of Credit or any Affiliate of M&T Bank that may from time to time issue Facility Letters of Credit, and their successors and assigns in such capacity. “ JPMorgan ” means JPMorgan Chase Bank, N.A., a national association formed and existing under the laws of the United States of America. “ JPMorgan Exposure ” means the sum of: (a) the aggregate maximum amount that Borrower and its Subsidiaries could be required to pay under the Customer Note Sale Guaranties and the JPMorgan Letters of Credit, plus (b) the aggregate amount of all unreimbursed disbursements made by JPMorgan or its Affiliates pursuant to the JPMorgan Letters of Credit. “ JPMorgan Letters of Credit ” means the Existing JPMorgan Letters of Credit and the Letters of Credit issued by JPMorgan after the Original Effective Date for the account of the Borrower or any of its Subsidiaries. “ JPMorgan Obligations ” means the obligation of the Borrower and its Subsidiaries to pay to JPMorgan under the Customer Note Sale Guaranties and the obligation of the Borrower and its Subsidiaries to reimburse JPMorgan or its Affiliates with respect to any disbursement made pursuant to a JPMorgan Letters of Credit. “ Letter of Credit ” of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable. “ Leverage Ratio ” means, as of the date of its determination, with respect to the Borrower, the ratio of: (a) Funded Debt as of such date, over (b) EBITDA for the twelve (12) months ending as of such date. 13
“ LIBOR Rate ” means with respect to a Eurocurrency Loan for any Interest Period thereof: (a) an interest rate per annum at which U.S. dollar deposits are offered in the London interbank market in an amount approximately equal to the portion of the Loan subject to the LIBOR Rate for a period of time equal to such Interest Period that appears on Page 3750 of the Dow Jones Markets Service (or on an successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service), as determined by the Agent after 11:00 a.m. (London time) on the day that is two (2) Business Days prior to the first day of such Interest Period; (b) if no such rate appears on the Telerate Page 3750, the rate of interest determined by the Agent to be the average of up to four interest rates per annum at which U.S. Dollar deposits are offered in the London interbank market in an amount approximately equal to the portion of the Loan subject to the LIBOR Rate, for a period of time equal to such Interest Period which appear on the Reuter’s Screen LIBOR Page as of 11:00 a.m. (London time) two (2) Business Days prior to the Business Day on which such Interest Period begins if at least two such offered rates so appear on the Reuter’s Screen LIBOR Page, or (c) if no such rate appears on the Telerate Page 3750 and fewer than two offered rates appear on the Reuter’s Screen LIBOR Page, the rate of interest at which deposits in an amount approximately equal to the portion of the Loan as to which the related LIBOR Rate has been elected and which have a term corresponding to such Interest Period are offered to the Agent by first class banks in the London inter-bank market for delivery in immediately available funds at a LIBOR Office on the first day of such Interest Period as determined by the Agent at approximately 11:00 a.m. (London time) two (2) Business Days prior to the date upon which such Interest Period is to commence (which determination by shall, in the absence of manifest error, be conclusive). “ Lien ” means any interest in property securing any Debt or other obligation owed to, or a claim by, a Person other than the owner of the property, whether the interest is based on common law, statute or contract (including the security interest or lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes). The term “Lien” shall not include minor reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions and other minor title exceptions affecting real property, provided that they do not constitute security for a monetary obligation. For the purposes of this Agreement, the Borrower or a Subsidiary shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement, Capital Lease or other arrangement pursuant to which title to the property has been retained by or vested in some other Person for security purposes, and such retention or vesting shall be deemed to be a Lien. “ Loan ” or “ Loans ” means, as the context may require, Revolving Loans, Term Loans and/or Swing Line Loans. 14
“ Loan Documents ” means this Agreement, the Notes, the Facility Letters of Credit, the Fee Letter, the Authorization Letter, the Security Documents, the Guaranty, the Omnibus Assignment, the Termination Agreement, the letter agreement described in Section 4.01(l) below and any certificate or other document furnished pursuant to or in connection with this Agreement or any of the foregoing. “ Material Adverse Effect ” means a material adverse effect on: (a) the business, assets, operations, prospects or financial condition of the Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of its obligations under this Agreement or any other Loan Document, (c) the ability of any of the Credit Parties other than the Borrower to perform any of their respective obligations under any other Loan Document, or (c) the rights of or benefits available to the Agent or any of the Banks under this Agreement and the other Loan Documents, including, without limitation, the enforceability of the Security Documents or the attachment, perfection or priority of any Liens intended to be created thereby, or the validity of any of the Loan Documents or the consummation of any of the transactions contemplated therein. “ M&T Bank ” means Manufacturers and Traders Trust Company, a New York banking corporation, and its successors. “ Multiemployer Plan ” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA to which the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the preceding five plan years made or accrued an obligation to make contributions. “ Multiple Employer Plan ” means an employee benefit plan, other than a Multiemployer Plan, to which the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate, and one or more employers other than the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate, is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan. “ Net Cash Proceeds ” means: (a) with respect to any sale, lease, transfer, casualty loss or other disposition (including condemnation, confiscation or other similar event) or loss of any assets of the Borrower or its Subsidiaries other than those contemplated by Sections 7.06(b) and (c), the aggregate cash proceeds (including cash proceeds received pursuant to policies of insurance or by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received by the Borrower or any of its Subsidiaries pursuant to such disposition net of: (i) the direct costs relating to any non-Affiliate for such sale, lease, transfer, casualty loss or other disposition (including condemnation, confiscation or other similar event) or loss (including sales commissions and legal, accounting and investment banking fees), (ii) taxes paid or reasonably estimated by the Borrower to be payable as a result thereof (after 15
taking into account any available tax credits or deductions and any tax sharing arrangements), and (iii) amounts required to be applied to the repayment of any Debt secured by a Lien on the asset subject to such any sale, lease, transfer, casualty loss or other disposition (including condemnation, confiscation or other similar event) or loss (other than the Obligations); (b) with respect to any Equity Issuances, the aggregate cash proceeds received by the Borrower or any of its Subsidiaries pursuant to such issuance, net of the direct costs relating to such issuance (including sales and underwriters’ commissions); and (c) with respect to any issuance of Funded Debt, the aggregate cash proceeds received by the Borrower or any of its Subsidiaries pursuant to such issuance, net of the direct costs of such issuance (including up-front, underwriters’ and placement fees). “ Non-Financed Capital Expenditures ” means, with respect to the Borrower and its Subsidiaries (determined on a consolidated basis), as of the date of determination, all Capital Expenditures for the for the twelve (12) month period ending on such date paid out of the operating cash flow or the proceeds of the Revolving Loans or Swing Line Loans. “ Notes ” mean the Revolving Credit Notes, the Swing Line Note and the Term Loan Notes. “ Notice ” means that form Notice of Borrowing/Conversion/Continuation in the form of Exhibit G hereto evidencing the Borrower’s request for funding and/or the continuation or conversion of an applicable rate of interest. In the case of any Eurocurrency Loans, such Notice shall also indicate the applicable Interest Period. “ Obligations ” means all: (a) Loans, unreimbursed Facility LC Disbursements, advances, debts, liabilities, obligations (monetary or otherwise, including post-petition interest, allowed or not), covenants and duties owing by any Credit Party to the Agent, any Bank, the Swing Bank, the Issuing Bank or any Affiliate of any of the foregoing or any indemnified Person hereunder, of any kind or nature, present or future, arising under this Agreement or any other Loan Document, including all interest, charges, expenses, fees, reasonable attorneys’ fees and disbursements, and any reimbursement obligations of each Credit Party in respect of Letters of Credit and surety bonds, (b) all Hedging Obligations of each Credit Party permitted hereunder which are owed to any Bank or its Affiliate, (c) all Bank Product Obligations of the Borrower or any of its Subsidiaries permitted hereunder which are owed to any Bank or its Affiliates, and (d) JPMorgan Obligations, in all cases whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. “ Omnibus Assignment ” means that certain Omnibus Assignment dated as of the Original Effective Date, whereby the Borrower and the Banks agreed, among other things, to: (a) accept the resignation of JPMorgan Chase Bank, N.A. as Agent, (b) appoint the Agent as the successor 16
agent to JPMorgan Chase Bank, N.A., and (c) JPMorgan Chase Bank, N.A. assigned to the Agent all of its rights, title and interest under, in and to guaranties, security agreement and other instruments executed by the Borrower and certain of its Subsidiaries in connection with: (i) that certain Multicurrency Agreement entered into by and among the Borrower and the Banks dated October 24, 2002, which Multicurrency Agreement was superseded and replaced by the terms of the Existing Credit Agreement, and (ii) that certain Term Loan Agreement entered into by and among the Borrower and the Banks dated October 24, 2002, which Term Loan Agreement was superseded and replaced by the terms of the Existing Credit Agreement. “ Original Effective Date ” means January 28, 2005. “ Payor ” has the meaning given to such term in Section 10.13 hereof. “ PBGC ” means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA. “ Permitted Acquisitions ” means any Acquisition by the Borrower involving a Person which is engaged in a line of business which is the same or substantially similar to the business of the Borrower; provided (a) the Agent shall have received evidence reasonably satisfactory to them that any assets of such Person which are the subject of the Permitted Acquisition are, or will be promptly following the closing of such Permitted Acquisition, free and clear of all Liens, except Liens permitted pursuant to Section 7.02 and other Liens for which the Borrower has sought and obtained the prior written consent of the Agent, which consent may be withheld, conditioned or delayed in the sole discretion of the Agent; (b) no Default or Event of Default shall have occurred and be continuing immediately prior to or would occur after giving effect to the Acquisition on a pro forma basis, and (c) the Acquisition has either: (i) been approved by an officer of such Person which is transferring assets having authority to grant such approval, (ii) been approved by the Board of Directors or other governing body of the Person which is the subject of the Acquisition, or (iii) been recommended for approval by the Board of Directors or other governing body of such Person to the shareholders or other members of such Person and subsequently approved by the shareholders or such members if shareholder or such member approval is required under applicable law or the by-laws, certificate of incorporation or other governing instruments of such Person. “ Person ” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature. “ Plan ” means any Multiemployer Plan or Single-Employer Plan. “ Pledged Subsidiary ” means any: (a) Domestic Subsidiary which has all of its outstanding capital stock has been pledged to the Agent for the benefit of the Banks pursuant to the Security Documents, and (b) Foreign Subsidiary which has at least sixty five percent (65%) of its outstanding capital stock pledged to the Agent for the benefit of the Banks pursuant to the Security Documents. 17
“ Prime Rate ” means that rate of interest from time to time announced by the Reference Bank at its Principal Office as its prime commercial lending rate. “ Principal Office ” means the principal office of the Agent, presently located at One M&T Plaza, Buffalo, New York. “ Prohibited Transaction ” means a transaction with respect to a Plan that is prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of the Code or Section 408 of ERISA. “ Pro Rata Share ” means: (a) with respect to a Bank’s obligation to make Revolving Loans, participate in Facility Letters of Credit, reimburse the Issuing Bank, participate in Swing Loans and prior to an acceleration of all amounts due under the Notes in accordance with Section 9.02, to receive payments of principal, interest, fees, costs, and expenses with respect thereto: (i) prior to the Aggregate Revolving Commitment being terminated or reduced to zero, the percentage obtained by dividing (1) such Bank’s Revolving Commitment, by (2) the Aggregate Revolving Commitment, and (ii) from and after the time the Aggregate Revolving Commitment has been terminated or reduced to zero, the percentage obtained by dividing (1) the aggregate unpaid principal amount of such Bank’s Revolving Credit Exposure (after settlement and repayment of all Swing Line Loans by the Banks), by (2) the Aggregate Revolving Credit Exposure; (b) with respect to a Bank’s obligation to make a Term Loan and prior to an acceleration of all amounts due under the Notes in accordance with Section 9.02, to receive payments of interest, fees, and principal with respect thereto: (i) prior to the making of the Term Loans, the percentage obtained by dividing: (1) such Bank’s Term Loan Commitment, by (2) the Aggregate Term Loan Commitment, and (ii) from and after the making of the Term Loans, the percentage obtained by dividing: (1) the unpaid principal amount of such Bank’s Term Loan, by (2) the unpaid principal amount of all Term Loans of all Banks; (c) with respect to the allocation and payment of any proceeds received after the acceleration of all amounts due under the Notes in accordance with Section 9.02, the percentage obtained by dividing: (i) all of the Obligations (including required payments into the Facility Letter of Credit Collateral Shortfall Account) owed to the applicable Bank and payable under the applicable subsection of Section 2.05(a)(iv), by (ii) the aggregate amount of all Obligations (including required payments into the Facility Letter of Credit Collateral Shortfall Account) owed to all the Banks and payable under the applicable subsection of Section 2.05(a)(iv); and (d) with respect to all other matters as to a particular Bank, the percentage obtained by dividing: (i) the amount of such Bank’s Revolving Credit Exposure (after settlement and repayment of all Swing Line Loans by the Banks) plus the unpaid principal amount of such 18
Bank’s Term Loan, by (ii) the Aggregate Revolving Credit Exposure plus the unpaid principal amount of all Term Loans. “ Purchase Money Debt ” means and includes: (a) Debt (other than the Obligations) for the payment of all or any part of the purchase price of any fixed assets, (b) any Debt (other than the Obligations) incurred at the time of or within ten (10) days prior to or after the acquisition of any fixed assets for the purpose of financing all or any part of the purchase price thereof, and (c) any renewals, extensions, or refinancings thereof, but not any increases in the principal amounts thereof outstanding at such time, including, for purposes of this definition, any such Debt constituting a Capital Lease. “ Purchase Money Lien ” means a Lien upon fixed assets which secures Purchase Money Debt, but only if such Lien shall at all times be confined solely to the fixed assets to the extent they had their purchase price financed through the incurrence of Purchase Money Debt. “ Quarterly Date ” means the last day of March, June, September, and December in each year, the first of which shall be the first such day after the date of this Agreement. “ Reaffirmation Agreement ” shall mean and refer to the Reaffirmation Agreement dated on or about the date of this Agreement, whereby: (a) the Borrower, certain Subsidiaries of the Borrower and any other Persons listed on the signature pages to the Security Agreement, shall among other things, reaffirm their respective obligations under the Security Agreement, as such agreement may be amended, supplemented, restated or otherwise modified from time to time, and (b) each Guarantor shall, among other things, reaffirm its respective obligations under the Guaranty, as such agreement may be amended, supplemented, restated or otherwise modified from time to time. “ Reference Bank ” means M&T Bank. “ Regulation D ” means Regulation D of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time. “ Regulation U ” means Regulation U of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time. “ Regulatory Change ” means, with respect to any Bank, any change after the Original Effective Date in United States federal, state, municipal or foreign laws or regulations (including, without limitation, Regulation D) or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks including such Bank of or under any United States, federal, state, municipal or foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof. “ Required Banks ” means, (a) at any time while no Obligations are outstanding, Banks having Commitments equal to at least 66 2/3% of the Aggregate Commitments and, (b) at any 19
time while any Obligations remain outstanding and unpaid, Banks having a Revolving Credit Exposure, unused Revolving Commitment and unpaid principal with respect to their Term Loans which constitute at least 66 2/3% of the sum of (i) the Aggregate Revolving Credit Exposure and, to the extent unused, the Aggregate Revolving Commitment, and (ii) the unpaid principal amount of all outstanding Term Loans. “ Required Payment ” has the meaning given to such term in Section 10.13 hereof. “ Reportable Event ” means an event described in Section 4043 of ERISA or the regulations thereunder with respect to a Plan, other than those events as to which the notice requirement is waived under subsection .22, .23, .25, .27, .28, .29, .30, .31, .32, .34, .35, .62, .63, 64, .65 or .67 of PBGC Regulation Section 4043. “ Reserve Requirement ” means, with respect to any Interest Period, the reserve percentage (expressed as a decimal) in effect from time to time during such Interest Period, as provided by the Federal Reserve Board, or any other governmental authority, applied for determining the maximum reserve requirements (including, without limitation, basic, supplemental, marginal and emergency reserves) applicable to M&T Bank under Regulation D of the of the Board of Governors of the Federal Reserve System with respect to “Eurocurrency liabilities” within the meaning of Regulation D, or under any similar or successor regulation with respect to Eurocurrency liabilities or Eurocurrency funding. Without limiting the effect of the foregoing, the Reserve Requirement shall also reflect any other reserves required to be maintained by M&T Bank by reason of any Regulatory Change against: (a) any category of liabilities which includes deposits by reference to which the LIBOR Rate for Eurocurrency Loans is to be determined as provided in the definition of “LIBOR Rate” in this Section 1.01 or (b) any category of extensions of credit or other assets which include Eurocurrency Loans. “ Revolving Commitment ” means, with respect to each Bank, the commitment and obligation of such Bank to make Revolving Loans under the terms of this Agreement and to participate in Facility Letters of Credit and Swing Line Loans under the terms of this Agreement, in an aggregate principal amount not to exceed the amount set forth opposite such Bank’s name on Schedule III , or in an Assignment and Assumption Agreement executed by it, in all cases as such amount may be modified from time to time in accordance with the terms hereof. “ Revolving Credit Exposure ” means, with respect to any Bank at any time, the sum of: (a) the outstanding principal amount of such Bank’s Revolving Loans, (b) such Bank’s Facility LC Exposure, and (c) such Bank’s Swing Line Exposure at such time. “ Revolving Credit Notes ” means the Amended and Restated Revolving Credit Notes of the Borrower to each of the Banks in the principal amount of their respective Revolving Commitment, in the form of Exhibit B hereto evidencing the Revolving Loans made by the Banks hereunder (each a “ Revolving Loan Note ”) as the same may be amended, modified, extended, renewed, restated, consolidated and replaced from time to time. “ Revolving Loans ” means any Loan made pursuant to Section 2.01. 20
“ ROC Joint Venture Agreement ” means the Joint Venture Agreement dated as of February 12, 1999 entered into by and among the Borrower and the ROC Shareholders, as the same may have been amended, supplemented, restated or otherwise modified from time to time. “ ROC Shareholders ” shall mean and refer to the ROC Shareholders identified under the terms of the Joint Venture Agreement (as such agreement was in effect on February 12, 1999) as Mr. R.M. Yang, Ms. Shain Wu, Mr. Paul Ling and Ms. J.R. Ho. “ Security Agreement ” means the Amended and Restated Security Agreement granted by the Borrower, certain Subsidiaries of the Borrower and any other Persons listed on the signature pages thereto, in favor of the Agent for the benefit of the Banks dated as of the Original Effective Date, securing among other things, the Obligations and in form and substance satisfactory to the Agent and the Banks, as such agreement may be amended, supplemented, restated or otherwise modified from time to time. “ Security Agreement Supplement ” means supplements to the Security Agreement to be executed by the required Subsidiaries of the Borrower pursuant to Section 6.08 herein, which shall be in the form attached to the Security Agreement as an exhibit. “ Security Documents ” means collectively any and all documentation executed in connection with this Agreement which is intended, by virtue of its terms and conditions to serve as security for the Obligations of the Borrower under the terms of this Agreement or any Loan Document, any Credit Party under any Loan Document or otherwise, including, but not limited to, the Account Control Agreements, the Assignment of Leases and Rents, the Security Agreement, the Intellectual Property Security Agreement, each Security Agreement Supplement, each Intellectual Property Security Agreement Supplement, the Guaranty and each Guaranty Supplement. “ Single Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, to which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan. “ Subsidiary ” means, with respect to any Person, any corporation or other entity of which at least a majority of the securities or other ownership interests having ordinary voting power (absolutely or on a contingent basis) for the election of directors or other persons performing similar functions are at the time owned directly or indirectly by such Person. “ Subsidiary Guarantor ” means certain of the Domestic Subsidiaries that have executed and delivered to the Agent for the benefit of the Banks the Guaranty or a Guaranty Supplement. 21
“ Subsidiary Real Property Liens ” has the meaning given to such term in Section 5.12 hereof. “ Swing Bank ” means M&T Bank, in its capacity as Bank of Swing Line Loans hereunder. “ Swing Line Exposure ” means, at any time, the aggregate principal amount of all Swing Line Loans outstanding at such time. The Swing Line Exposure of any Bank at any time shall be its Pro Rata Share of the Swing Line Exposure at such time determined in accordance with the foregoing sentence. “ Swing Line Loan ” has the meaning given to such term in Section 2.13 hereof. “ Swing Line Note ” means the Amended and Restated Swing Line Note of the Borrower to the Swing Line Bank in the principal amount of $7,000,000, in the form of Exhibit C hereto evidencing the Swing Line Loans made by the Swing Line Bank, as the same may be amended, modified, extended, renewed, restated, consolidated and replaced from time to time. “ Syndication Agent ” means JPMorgan Chase Bank, N.A. in its capacity as the syndication agent of the Banks, and not in its individual capacity as a Bank. “ Synthetic Lease Obligations ” means all monetary obligations of a Person under: (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations which do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the Debt of such Person (without regard to accounting treatment). “ Termination Agreement ” means the Termination Agreement by and among the Existing Agent, the Documentation Agent and the Banks dated as of the Original Effective Date, whereby the parties thereto agreed, among other things, to terminate that certain Intercreditor Agreement dated on or about October 24, 2002 by and among such parties. “ Termination Date ” means January 28, 2010. “ Term Loan Commitment ” means, with respect to each Bank, the commitment and obligation of such Bank to make Term Loans under this Agreement, in an aggregate principal amount not to exceed the amount set forth opposite such Bank’s name on Schedule IV , or in an Assignment and Assumption Agreement executed by it, in all cases as such amount may be modified from time to time in accordance with the terms hereof. “ Term Loan Maturity Date ” means January 28, 2011. “ Term Loan Notes ” means the Amended and Restated Term Loan Notes of the Borrower to each of the Banks in the principal amount of their respective Term Loan Commitment, in the form of Exhibit D hereto evidencing the Term Loans made by the Banks hereunder (each a 22
“ Term Loan Note ”) as the same may be amended, modified, extended, renewed, restated, consolidated and replaced from time to time. “ Term Loan Quarterly Payment Dates ” means the 20th day of each June, September, December and March in each year. “ Taiwanese Property ” shall mean and refer to the lands located at and commonly known as 305 Nan-Kang Sub-section Lin-Tze Section, Nanto County, Taiwan and the buildings thereon (including a four-floor office building and a factory with two floors above the ground level and one basement below the ground level. “ USA Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001. “ Variable Rate ” means, for any day, the higher of: (a) the Federal Funds Rate for such day plus fifty (50) Basis Points, and (b) the Prime Rate for such day. Any change in the Variable Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively. “ Variable Rate Loan ” means any Loan when and to the extent the interest rate for such Loan is determined in relation to the Variable Rate. “ Wholly Owned Subsidiary ” shall mean a Subsidiary for which all of the outstanding shares of stock or other equity of such entity is owned directly or indirectly by Borrower or one of Borrower’s Wholly Owned Subsidiaries. Section 1.02 . Other Defined Terms; Rules of Interpretation . (a) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise expressly provided therein. (b) As used herein and in any certificate or other document made or delivered pursuant hereto, accounting terms not defined herein and accounting terms partly defined herein to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” Unless the context in which used herein otherwise clearly requires, “or” has the inclusive meaning represented by the phrase “and/or.” 23
(d) Terms defined in this Agreement by reference to any other agreement, document or instrument shall have the meanings assigned to them in such agreement, document or instrument, whether or not such agreement, document or instrument is then in effect. (e) All terms defined in the UCC and not otherwise defined herein have the meanings assigned to them in the UCC. (f) References to Articles, Sections, subsections, Exhibits, Schedules and the like, are to Articles, Sections, subsections of, or Exhibits or Schedules attached to, this Agreement (as amended from time to time) unless otherwise expressly provided. (g) Defined terms include in the singular number the plural and in the plural number the singular. (h) Reference to any law, rule, regulation, order, decree, requirement, policy, guideline, directive or interpretation means as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect on the determination date, including rules and regulations promulgated thereunder. (i) All references herein to the Banks or any of them shall be deemed to include the Issuing Bank unless specifically provided otherwise or the context otherwise requires. Section 1.03 . Amendment and Restatement . This Agreement is and shall for all purposes be deemed to be an amendment and a restatement of the provisions of the Existing Credit Agreement. This Agreement shall supersede the Existing Credit Agreement insofar as it constitutes the entire agreement between the parties concerning the subject matter of this Agreement, but does not constitute a novation of the Existing Credit Agreement or any of the Indebtedness, liabilities or obligations of the Borrower thereunder. All Existing Revolving Loans and Existing Term Loans together with all Existing Facility Letters of Credit pursuant to the Existing Credit Agreement shall be deemed to be Loans and Letters of Credit under this Agreement, and all Obligations (as defined in the Existing Credit Agreement) shall be deemed to be Obligations under this Agreement. 24
Section 2.01 . The Commitments . (a) Revolving Loans . (i) On the Effective Date, the Existing Revolving Loans and the Existing Bridge Loans shall automatically, and without any action on the part of any Person, be deemed to be Revolving Loans under this Agreement, and the Banks shall , through the Agent, make such adjustments as shall be necessary so that after giving effect thereto, each Bank holds its Pro Rata Share of the outstanding Revolving loans, provided that such amount is not greater than its Revolving Commitment. (ii) Subject to the terms and conditions set forth in this Agreement, each Bank agrees to make Revolving Loans to the Borrower from time to time from the Effective Date until the Termination Date in an aggregate principal amount that will not result in: (A) such Bank’s Revolving Credit Exposure exceeding such Bank’s Revolving Commitment, and (B) the Aggregate Revolving Credit Exposure exceeding the Aggregate Revolving Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, repay and re-borrow from time to time Revolving Loans. (b) Term Loans . Immediately prior to the Effective Date, the Banks held the Existing Term Loans with an aggregate outstanding principal amount being $21,600,000. On the Effective Date, the Existing Term Loans held by each Bank shall automatically, and without any action on the part of any Person, be deemed to be Term Loans under this Agreement. Section 2.02 . The Notes and Recordkeeping . (a) The Revolving Credit Loans of each Bank shall be evidenced by a Revolving Credit Note, with appropriate insertions, payable to the order of such Bank in a face principal amount equal to the sum of such Bank’s Revolving Commitment. The Term Loans of each Bank shall be evidenced by a Term Loan Note, with appropriate insertions, payable to the order of such Bank in a face principal amount equal to the sum of such Bank’s Term Loan Commitment. The Swing Loans shall be evidenced by a Swing Line Note, with appropriate insertions, payable to the order of the Swing Line Bank in a face principal amount equal to $7,000,000. Each Note shall be dated the date of this Agreement and otherwise duly completed and executed by the Borrower. (b) The date, type, amount, interest rate, duration of Interest Period, and conversion of each Loan made by each Bank to the Borrower, and each payment made on account of the principal thereof, shall be recorded by such Bank on its books and, on the schedule attached to each Note or any continuation thereof. The aggregate unpaid principal amount so recorded shall be presumptive evidence of the principal amount of the Loans owing and unpaid. The failure of such Bank to make, or any error in making, any such recordation shall not affect the Obligations of Borrower hereunder or under any Note to pay when due of any 25
amount owing hereunder or under such Note in respect of the Loan together with interest accruing thereon. Section 2.03 . Purpose . The Borrower shall use the proceeds of the Revolving Loans to refinance Existing Revolving Loans and Existing Bridge Loans and Swing Line Loans and may otherwise use the proceeds of the Revolving Loans: (i) for working capital requirements and other general corporate purposes in the ordinary course of business and (ii) up to a maximum of $5,000,000 to fund Permitted Acquisitions. The proceeds of Swing Line Loans may be used only for working capital requirements and general corporate purposes in the ordinary course of business. The Borrower shall use the proceeds of the Term Loans to refinance the Existing Term Loans. Notwithstanding any provision herein to the contrary, the proceeds of the Borrower shall not use the proceeds from any Loans, whether immediately, incidental or ultimate, for the purpose of buying or carrying “margin stock” within the meaning of Regulation U. Section 2.04 . Borrowing Procedures . (a) To effect a funding, the Borrower shall give the Agent a Notice, delivered in accordance with this Section 2.04 and in Section 2.08, specifying the type, amount and date of each intended borrowing and the manner in which the same will be disbursed. (b) Each Revolving Loan shall be, and each Term Loan may be, divided into tranches which are, either a Variable Rate Loan or a Eurocurrency Loan (each a “ type ” of Loan), as the Borrower shall specify in the related notice of borrowing or conversion pursuant to Section 2.08. Both Variable Rate Loans and Eurocurrency Loans may be outstanding at the same time, provided that not more than eight (8) different Eurocurrency Loans shall be outstanding at any one time. Each request for a Eurocurrency Loan shall be treated as a single Loan, this despite any Eurocurrency Loans having the same Interest Period which expire on the same day. All borrowings, conversions and repayments of Loans shall be effected so that each Bank will have a ratable share, according to its Pro Rata Share, of all types of Loans. (c) Promptly upon receipt of each Notice, the Agent shall advise each Bank thereof and their respective proportionate share of the Loans. The amount so received by the Agent shall, subject to the conditions of this Agreement, be made available to the Borrower, in immediately available funds, by the Agent crediting an account of the Borrower designated by the Borrower and maintained with the Agent at a banking office designated by the Agent, provided that Revolving Loans made to finance the reimbursement of a Facility LC Disbursement as provided in Section 2.14(e) shall be remitted by the Agent to the Issuing Bank. (d) Unless the Agent shall have received notice from a Bank prior to the proposed date of any borrowing under this Agreement that such Bank will not make available to the Agent such Bank’s share of such borrowing, the Agent may assume that such Bank has made such share available on such date in accordance with Section 2.04(c) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Bank has not in fact made its share of the applicable borrowing available to the Agent, then the applicable Bank and the Borrower severally agree to pay to the Agent forthwith on demand such 26
corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Agent, at: (i) in the case of such Bank, the greater of the Federal Funds Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation, or (ii) in the case of the Borrower, the interest rate applicable to Variable Loans. If such Bank pays such amount to the Agent, then such amount shall constitute such Bank’s Loan included in such borrowing. (a) Except to the extent otherwise provided herein, all payments of principal of and interest on Loans payable by the Borrower under this Agreement and the Notes shall be made in immediately available funds not later than 11:00 a.m. New York time on the date on which such payments shall become due (each such payment made after such time on such date to be deemed to have been made on the next succeeding Business Day). So long as no Default or Event of Default has occurred and is continuing: (i) payments matching specific scheduled payments then due shall be applied to those scheduled payments, and (ii) voluntary and mandatory prepayments shall be applied as set forth in Section 2.12. Subject to the foregoing, and except as otherwise below, all principal payments in respect of the Loans (other than the Swing Line Loans) shall be applied first, to repay outstanding Variable Rate Loans and then to repay outstanding Eurocurrency Loans in direct order of Interest Period maturities. After the occurrence and during the continuance of a Default or Event of Default, payment by Borrower or any Credit Party to and all amounts collected or received by the Agent or any Bank as payments from the Borrower or any Credit Party or otherwise or as proceeds from the sale of, or other realization upon, all or any part of the collateral, shall be applied as follows anything contained herein to the contrary notwithstanding: (i) first, to the payment of any outstanding costs and expenses incurred by the Agent in protecting, preserving or enforcing rights under this Agreement and the other Loan Documents and in any event including all costs and expenses of a character which the Borrower has agreed to pay under Section 11.03 hereof (such funds to be retained by the Agent for its own account unless it has previously been reimbursed for such costs and expenses by the Banks, in which event such amounts shall be remitted to the Banks to reimburse them for payments theretofore made to the Agent); (ii) second, to the payment of any outstanding interest or other fees or indemnification amounts due with respect to the Obligations, ratably as among the Agent and the Banks in accord with the amount of such interest and other fees or indemnification amounts owing each; (iii) third, to the payment of the principal of the Swing Loans; (iv) fourth, to the payment of all other Obligations in accordance with each Bank’s Pro Rata Share (including required payments into the Facility Letter of Credit Shortfall Collateral Account), except that the JPMorgan Obligations shall be only to a maximum 27
amount of $8,000,000 and the Bank Product Obligations of Subsidiaries of the Borrower that are not Credit Parties shall be only to a maximum of $3,000,000; (v) fifth, to payment of any remaining unpaid JPMorgan Obligations and Bank Product Obligations; and (vi) sixth, to the Borrower or to whomever the Agent reasonably determines to be lawfully entitled thereto. If the due date of any payment under this Agreement or the Notes would otherwise fall on a day which is not a Business Day, such date shall be extended to the next succeeding Business Day and interest shall be payable for any principal so extended for the period of such extension. Each payment received by the Agent hereunder or under the Notes for the account of a Bank shall be paid promptly to such Bank, in immediately available funds. (b) Unless earlier due pursuant to Section 2.12 or Section 9.02, the Revolving Loans of each Bank shall be paid in full and the Revolving Commitments shall terminate on the Termination Date. (c) Unless earlier due pursuant to Section 2.12 or Section 9.02, the Borrower promises to pay to the Agent, for the pro rata accounts of the Banks in accordance with their Pro Rata Share, the principal amount of the Term Loans in seventeen (17) consecutive quarterly payments on each Term Loan Quarterly Payment Date in an amount equal to the amount set forth in the table below opposite the calendar year containing the date of such payment (subject to reductions from prepayments as set forth in Section 2.12), commencing on December 20, 2006, with a final payment due on the Term Loan Maturity Date in an amount equal to the unpaid balance of the Term Loans.
Section 2.06 . Interest Periods . In the case of each Eurocurrency Loan, the Borrower shall select in each Notice an Interest Period of any duration in accordance with the definition of Interest Period in Section 1.01 hereof, subject to the following limitations: (a) in the case of Revolving Loans, no Interest Period may extend beyond the Termination Date; (b) in the case of Term Loans if, after giving effect to an Interest Period, the aggregate principal amount of all Term Loans having Interest Periods ending after any date on which an installment of the Term 28
Loans is scheduled to be repaid would exceed the aggregate principal amount of the Term Loans scheduled to be outstanding after giving effect to such repayment, such Interest period may not be selected, (c) notwithstanding clause (a) above, no Interest Period for a Eurocurrency Loan shall have a duration less than one month and if any such proposed Interest Period would otherwise be for a shorter period, such Interest Period shall not be available; and (d) if an Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next Business Day, unless, in the case of a Eurocurrency Loan, such Business Day would fall in the next calendar month in which event such Interest Period shall end on the immediately preceding Business Day. (a) Interest shall accrue on the outstanding and unpaid principal amount of each Loan for the period from and including the date of such Loan to but excluding the date such Loan is paid at the following rates per annum: (i) for a Variable Rate Loan, at a rate per annum equal to the Variable Rate plus the Applicable Margin, and (ii) for a Eurocurrency Loan, at a fixed rate equal to the Eurocurrency Rate plus the Applicable Margin. If the principal amount of any Loan and any other Obligation payable by the Borrower hereunder or under a Note or other Loan Document shall not be paid when due (at stated maturity, by acceleration or otherwise), interest shall accrue at the Default Rate on such amount to the full extent permitted by law from and including such due date to but excluding the date such amount is paid in full. (b) The applicable LIBOR Rate for each Interest Period for each Eurocurrency Loan shall be determined by the Agent, and notice thereof shall be given by the Agent promptly to the Borrower and each Bank. Each determination of the applicable LIBOR Rate by the Agent shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error. The Agent shall, upon written request of the Borrower or any Bank, deliver to the Borrower or such Bank a statement showing the computations used by the Agent in determining any applicable LIBOR Rate hereunder. (c) Interest shall be computed for the actual number of days elapsed on the basis of a year of 360 days; provided that calculations of interest with respect to Variable Rate Loans shall be for the actual number of days elapsed on the basis of a year of 365/366 days. The applicable interest rate for each Variable Rate Loan shall change simultaneously with each change in the Variable Rate. (d) Accrued interest on each Variable Rate Loan shall be payable in arrears on each Quarterly Date for Revolving Loans and each Term Loan Quarterly Payment Date for Term Loans, upon a prepayment of any such Loan and at maturity of any such Loan. Accrued interest on each Eurocurrency Loan shall be payable on the last day of each Interest Period relating to such Loan (and, in the case of a Eurocurrency Loan with an Interest Period in excess of three months, on the three-month anniversary of the first day of such Interest Period), upon a prepayment of any such Loan, and at maturity of any such Loan. After maturity, and at any time an Event of Default exists, accrued interest on all Loans shall be payable on demand. 29
Section 2.08 . Certain Notices . (a) The Borrower shall deliver to the Agent a Notice for: (1) each borrowing pursuant to Section 2.04, and (2) each conversion/continuation of an Interest Period pursuant to Section 2.08(b). The Borrower shall also deliver to the Agent advance written notice pursuant to this Section 2.08 of each prepayment pursuant to Section 2.12 and each reduction or termination of the Revolving Commitments pursuant to Section 2.09(b). All Notices received by the Agent shall be irrevocable and shall be effective only if received by the Agent: (i) in the case of borrowings for Variable Rate Loans, the Borrower shall deliver a Notice to the Agent no later than 2:00 p.m. New York time at least one (1) Business Day prior to the date of such borrowing, (ii) in the case of any prepayment for Variable Rate Loans, written notice shall be delivered to the Agent no later than 11:00 p.m. New York time on the date of prepayment, (iii) in the case of borrowings, conversion from a Variable Rate Loan to a Eurocurrency Loan, a conversion/ continuation of an Interest Period, prepayment or required prepayment for Eurocurrency Loans, written notice or a Notice (as applicable) shall be delivered to the Agent by 2:00 p.m., at least three (3) Business Days prior to the date of such borrowing, conversion of the applicable rate of interest, conversion/continuation of an Interest Period, prepayments and/or required prepayment for Eurocurrency Loans; (iv) in the case of Swing Line Loans, a Notice shall be delivered to the Agent no later than 12:00 noon, New York time, on the date of such borrowing, and (v) in the case of reductions or terminations of the Revolving Commitments, written notice shall be delivered to the Agent at least three (3) Business Days prior thereto. Each written notice of reduction or termination shall specify the amount of the Revolving Commitments to be reduced or terminated. Each Notice for the conversion/continuation of a Loan shall specify the proposed date of conversion or continuation; the aggregate amount of Loans to be converted or continued; the type of Loans resulting from the proposed conversion or continuation; and in the case of conversion into, or continuation of, Eurocurrency Loans the duration of the requested Interest Period therefor. Without limiting the foregoing, any failure by the Borrower to deliver the required notice in connection with the prepayment of any Eurocurrency Loan will result in the payment of any necessary fees or costs (if any) as described in Section 3.05 below. (b) If upon the expiration of any Interest Period applicable to Eurocurrency Loans, the Borrower has failed to select timely a new Interest Period to be applicable to such Eurocurrency Loans, the Borrower shall be deemed to have elected to convert such Eurocurrency Loans into Variable Rate Loans effective on the last day of such Interest Period. Furthermore, unless the Required Banks otherwise consent in writing, if there exists a Default or Event of Default, Borrower may not thereafter elect to have an existing Loan converted to a Eurocurrency Loan or have any new Eurocurrency Loans extended thereafter. Further, at the sole discretion of the Agent and the Required Banks, the Agent may convert any Eurocurrency Loan to a Variable Rate Loan. Notwithstanding the foregoing, if Borrower commences, or has commenced against it, any proceeding or request for relief under any bankruptcy, insolvency or similar laws not or hereafter in effect in the United States of America or any state or territory thereof or any foreign jurisdiction or any formal or informal proceeding for dissolution, liquidation or settlement of claims against or winding up of affairs of Borrower (sometimes hereinafter collectively referred to as a “ Bankruptcy Event ”), any outstanding Eurocurrency Loans shall be automatically converted to Variable Rate Loans without further action of the Agent and/or the Banks, Nothing 30
herein shall be construed as a waiver by the Banks to have any Obligations accrue interest at the Default Rate. (c) Subject to Sections 2.08(a) and 2.10, and subject to the restrictions on the number of Eurocurrency Loans that may be outstanding at any given time as set forth in Section 2.04(b) above, the Borrower may, upon irrevocable written notice to the Agent: (i) Elect, as of any Business Day, to convert any Variable Rate Loans into Eurocurrency Loans; or (ii) Elect, as of the last day of the applicable Interest Period, to continue all or any part of any Eurocurrency Loans having Interest Periods expiring on such day for a new Interest Period of its choice, provided that after giving effect to any prepayment, conversion or continuation: or (iii) Elect, as of the last day of the applicable Interest Period, to convert any or a part of any Eurocurrency Loan into a Variable Rate Loan. Section 2.09 . Changes in Revolving Commitment . (a) The Borrower shall have the right to reduce or terminate the amount of unused Revolving Commitments at any time or from time to time, provided that: (i) the Borrower shall give notice of each reduction or termination to the Agent as provided in Section 2.08(a); and (ii) each partial reduction shall be in an aggregate amount of at least Three Million Dollars ($3,000,000). (b) The Revolving Commitments once reduced or terminated may not be reinstated. All reductions in the Revolving Commitments shall be made pro rata according to the amount of each Bank’s Revolving Commitment. Any reduction of the Revolving Commitments to a level below the maximum principal amount set forth in Section 2.13(a) for Swing Line Loans and the maximum Facility LC Exposure set forth in Section 2.14(a) for Facility Letters of Credit shall effect a concurrent reduction in those amounts so as to equal the total Aggregate Revolving Commitments after giving effect to such reduction. Section 2.10 . Minimum Amounts . (a) Except for borrowings which exhaust the full remaining amount of the Aggregate Revolving Commitment, and prepayments which result in the prepayment of all Revolving Loans, each borrowing and prepayment of principal shall be in an amount equal to at least One Million Dollars ($1,000,000) and shall be in incremental multiples of One Hundred Thousand Dollars ($100,000). (b) Except for borrowings which exhaust the full remaining amount of the Swing Line Loan available to the Borrower, all Swing Line Loans shall be in an amount equal to 31
at least One Hundred Thousand Dollars ($100,000) and shall be in incremental multiples of Fifty Thousand Dollars ($50,000). (a) The Borrower shall pay to the Agent for the account of each Bank a fee (the “ Revolving Commitment Fee ”) on the daily average unused Revolving Commitment of such Bank for the period from and including the Original Effective Date to the earlier of the date the Bank’s Revolving Commitment is terminated or the Termination Date. The Revolving Commitment Fee shall equal the daily average unused Revolving Commitment of such Bank during the period for which payment is due, multiplied by the applicable Revolving Commitment Fee Rate. For purposes of calculating usage under this Section, the Revolving Commitment of each Bank shall be deemed used to the extent of the Revolving Credit Exposure, except that the Swing Loan Exposure shall not be taken into account for such purpose. The accrued Revolving Commitment Fee shall be due and payable in arrears, upon any reduction or termination of the Revolving Commitments and on each Quarterly Date commencing on the first such date after the Original Effective Date, and shall be calculated on the basis of a year of three hundred sixty (360) days for the actual number of days elapsed. (b) The Borrower shall pay to the Agent, for the b | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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